Strategy manager wrong about BTC backing STRC
A manager at Michael Saylor’s Strategy (formerly MicroStrategy) posted a claim to social media that the company’s STRC stock enjoys coverage by its bitcoin (BTC) collateral.
According to Chaitanya Jain, STRC relies on Strategy common stock for its bitcoin (BTC) “over-collateralization.”
A tweet posted by Jain at 9:02pm New York time on January 20 read, “$MSTR needs $STRC for $BTC amplification. $STRC needs $MSTR for $BTC over-collateralization.”
However, this is incorrect.
Indeed, there’s widespread misinformation and considerable confusion about the supposed BTC backing of Strategy’s various types of stock: MSTR, STRK, STRD, STRF, and STRC.
The fact is, BTC doesn’t collateralize any of Strategy’s publicly traded equities.
‘Not collateralized by the company’s BTC holdings’
The company has repeatedly disclosed that ownership of its securities “are not collateralized by the company’s BTC holdings.”
“Ownership of common stock does not represent an ownership interest in the BTC the company holds,” the company has stated in multiple SEC filings.
Nevertheless, Strategy and Saylor often tread dangerously close to the line. They regularly speak of BPS (BTC per share) of common stock, as well as BTC “coverage” of dividend payments.
Far from casual asides, these terms are key performance indicators and feature in quarterly earnings.
In its 2025 third quarter presentation, for example, the company published a claim that two of its preferred shares have “collateral coverage” as well as a “BTC rating” on the same slides.
This BTC rating divides the company’s BTC by the sum of those preferreds’ notional values and all shorter-duration/senior instruments.
Moreover, Strategy has tweeted that the company’s BTC holdings provide 71 years of dividend “coverage.”
Finally, Saylor has broadcasted messages for months about STRC competing with bank accounts, money markets, and even annuities, even though STRC derives almost all of its value from BTC.
“Everybody in the world would love to have a high yield bank account that yielded 10%,” Saylor has repeatedly said in reference to STRC and its so-called BTC rating.
Read more: The math behind MicroStrategy’s bitcoin bet
In other words, Strategy’s leadership repeatedly uses words that could confuse a regular person as to whether its BTC covers or collateralizes the company’s equities, while simultaneously disclaiming that it does.
Younger and less senior workers, such as Jain, apparently still get confused.
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